An analysis of air transportation infrastructure and its relationship with economic development

Abstract

This paper aims to examine how different socio-economic factors affect air passenger throughput. The analysis of this relationship seeks to answer the question of whether the infrastructure for air transportation is built based upon actual demand or whether airport infrastructure is a means to foster economic development. Such a question can contribute to difficulties in airport capacity planning. The research design is approached twofold. At first, air transportation throughputs are analysed in terms of different aspects such as institutional, demographic, economic and airport related factors (number of runways, number of destinations etc.). In a second step, spatial patterns are evaluated. Data is collected for prefecture level cities and grouped into three regions (east, west and central China). Results show that among the chosen variables, the urban administrative function (namely the status of being a provincial capital), the amount of foreign direct investment that flows into a prefecture level city and the total number of destinations, have the highest relative impact on air passenger throughput. Past years have also shown a strong relationship between the average wage and passenger throughput. In terms of spatial variation, the three regions differ according to their passenger throughput, number of airports, and capacity efficiency. However, statistical tests have not shown significant differences between the means or medians of the residuals of each region. These results imply that different regions require different expansion or capacity increase strategies according to the features of local economies and to the supply that is offered by an individual airport. The development strategy for air transportation infrastructure implemented in the past Five Year Plans is valid for western and eastern airports. However, the construction of additional airports in central China is not recommended based on the presented results. Policies that promote airlines to add additional destinations at certain airports is a more adequate strategy for central airports.